Competent Court in International Contracts
Determining the competent court in relation to the disputes arising from international contracts is an example that during the execution of the contract or in its correct fault, we have a dispute and contradiction. The importance of determining the competent court is due to the fact that in such contracts there are parties from two different countries with different domestic laws and there is even a possibility that the place of execution of the contract is different from the country of the parties to the contract.Therefore, determining the competent court and the law governing the settlement of contractual disputes in the contract seems to be necessary and inevitable.
The Competent Court in Dealing with Disputes in the Field of International Trade
Unlike international lawsuits such as the International Court of Justice, for which a special court has been established at the international level, in the field of international commercial lawsuits, we do not have a specific court to deal with such lawsuits.
Therefore, the parties have only two options:
Either, choose the competent court by mutual agreement in the contract. This competent court can be the national court of each party’s country or a third country where the subject of the contract can be performed. Or turn to alternative methods in resolving their disputes.
It should be noted that the only body handling commercial disputes in the international arena is the World Trade Organization.
Of course, the thing to consider in this case is that this organization only resolves the claims and disputes of its members; and no other merchants.
International Trade Agreements Between Iran and other Foreign Countries
In case of concluding an international contract where one of the parties is Iranian, there are 4 conceivable situations:
1. The place of entering the contract is Iran:
In this case, in accordance with Article 968 of the Civil Code, handling disputes arising from the contract will necessarily be handled by Iran’s domestic courts.
2. The parties have agreed on the jurisdiction of Iranian courts and domestic laws:
In this case, Iran’s courts will have jurisdiction, unless the law of the place of enter the contract stipulates otherwise.
3. The parties have agreed on the jurisdiction of the court and the laws of the government other than Iran:
In this case, the principle will be based on the lack of jurisdiction of Iran’s courts. Unless, by secondary agreement, they have chosen Iran to deal with the differences between them.
4. An agreement has been made only on the rule of other country:
In this case, Iranian courts will be competent to hear the request of the parties. Provided that they consider the agreed government law in issuing their vote.
Alternative Methods of Court Proceedings
In alternative methods, we do not deal with the investigation team called the courts of law. The authorities handling disputes in these methods are natural persons who enter into existing claims and disputes as a third party. Among the types of these methods, we can refer to arbitration, mediation and experts.
Refer to Arbitration
Today, one of the most popular methods of dispute resolution in the field of international commercial disputes is to refer to arbitration authorities. In the international commercial arbitration article, we have explained the arbitration in international commercial disputes in detail. Here we briefly explain the advantages of using this method. Among the reasons for the popularity of arbitration among international business owners, the following can be mentioned:
1. Speeding up the proceedings
2. Expertise in arbitration, especially in the field of international trade
3. Confidentiality of proceedings
4. Low cost
Up To Sum
Nowadays, due to the time-consuming nature of proceedings in courts and the existing limitations in handling such claims in domestic courts, alternative methods such as arbitration and mediation have been preferred. However, the power of contractual agreements should not be neglected. The importance of determining the dispute resolution authority, the competent court and the governing law in dealing with disputes arising from international contracts is undeniable.
